Twenty7Tec comments on the new rules for lifting restrictions

James Tucker, CEO of mortgage technology provider Twenty7Tec, comments on the detail of the new rules for lifting restrictions.

What effect did it have on the mortgage market?

Overnight, volumes dropped off a cliff. Within just a couple of weeks, total volumes of mortgage searches of all types were down by around 75% on early March levels.

Over the past eight weeks, purchase mortgage volumes have been particularly hard hit. That’s no surprise given that that people struggled to get valuations or even view the properties in person.

Products that were most attractive to first time buyers were removed. There was a market mismatch between the volume of demand at 90/95% LTV and the volume of products on offer at that level.

Overall, product volumes went down by around 60/65% as lenders adjusted. Special lenders and secondary lenders in particular took a breather from the market.

Remortgages held up well (80% of prior activity) until they took a small dip over the past 10 days or so.

New builds continued to sell as they were always capable of desktop valuation, but their stock wasn’t being replenished.

Will the recovery be V-shaped?

The first thing to say is that we will issue data again on a daily basis so that people can make the right decisions for their broker and lender businesses.

The second thing to say that the shape of the recovery will depend on how the pet up demand expresses itself. Will it all quickly come back into action or will confidence take time to return?

One proxy signal is how people feel about their children returning to school.

There’s the official position and date, and then there’s the feeling among a lot of parents that they won’t do anything to jeopardise their children’s wellbeing. Nobody really knows how it will go as of 1 June, but two weeks’ time feels like a long way away at the moment.

It’s the same with the housing market: the market is allowed to resume viewings, physical valuations but a lot of demand will depend on consumer confidence.

There are some opportunities for products in the market for the brave – first time buyers and buy to let both have demand volumes that need products.

Another challenge is that there’s likely to be regional variances as waves of infection come and go and some regions potentially enter partial lockdowns again. It’s a very complex picture and we’ll report what we’re seeing in terms of trends each day for the next few weeks.


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